‘A people friendly budget’

The passing of budget in the Nagaland Legislative Assembly on February 26 failed to evoke widespread discussion among the general masses, apart from the customary expression of derision over the burgeoning budget deficits accumulated over the years.

The lack of enthusiasm cannot be faulted and is understandable; the budget, devoid of any policy announcement or development, reads more like a customary yearly presentation of receipts and expenditure of the government.

On closer scrutiny, the opposition’s charge of ‘building castles in the air,’ by announcing new schemes and programmes announcement without fund allocation, is not completely unfounded. They should know better as the business, as usual, has been perfected over the years.

A simple cursory analysis of the budget statement will give a clear picture of how things stand.

For instance, if one looks at the government’s income (denoted as receipts in the budget), a gross receipts at Rs. 17,604.48 crore was estimated for the financial year 2019-20.

A breakup of this ‘income’ would show that, out of the total amount, Rs 1,109.16 crore or just over 6% is what the state government is generating by itself. The rests are assistance in the form of State’s Share in Central Taxes 4,192.50 crore; Central Assistance (Grants & Loans) – Rs 7,894.16 crore; Internal Debt (including Ways and means advances (WMA) from RBI) – Rs. 4,407.15 crore, and Recovery of Loans and Advances – Rs. 1.5 crore. In other words, nearly 46 % of State’s fund comes as Grants and Loans and 24% as Internal Debt.

The receipts pattern in a way gives a vivid glimpse of how those incomes are spent. For instance, with nearly 25.03% of the income as internal debt, the state spent over 28% of the income on Servicing of Debt (including repayment of WMA).

Another 46% is spent on non-development expenditure, leaving a mere 26% for developmental purposes (Rs 4678.95 crore) out of Rs 18,012.73 crore estimated expenditure. In other words, 76% of the total expenditure incurred does not create assets or brings new development for the state. One may call this normal expenses of the government, given the state of affairs.

Presenting the budget on February 26, Chief Minister Neiphu Rio, who also holds finance portfolio, termed it a ‘people friendly budget’; but such sober data conspicuously reflects the lack of room to manoeuvre for the government to implement such ‘people friendly’ policies.’

As a result, the money earmarked for developmental activities in 2019-20 was a minuscule Rs.609 crore in the budget estimated to close at a negative balance of Rs. 1,611.98 crore. Given the state of affairs, one is not sure whether the resources earmarked for the developmental activities, would reach the real beneficiaries – the general public.

Rio told a press conference after presentation that the budget for 2019-20 is a people friendly budget as the government is not “imposing any new taxes or placing any additional burden on the common people in order to generate revenue.”

However, it neither has scope for creating any new ‘people friendly’ schemes nor it can come out with an effective policy measure to generate new resources, notwithstanding the Chief Minister pledging the intention of the government to make an attempt to “mobilise resources through other means”

“If he can’t ignore facts, he’s got no business being a politician,” caustically quipped Sir Humphrey Appleby, the fictional character from the British political satire in an episode in ‘Yes Prime Minister.’

While the ‘reel life’ insinuations are often considered far reality, it is not unfounded. The State government may do well to bring its house in order, lest people begin to quip, ‘Reel life is being refelcted in Real life.’

’ would show that, out of the total amount, Rs 1,109.16 crore or just over 6% is what the state government is generating by itself. The rests are assistance in the form of State’s Share in Central Taxes 4,192.50 crore; Central Assistance (Grants & Loans) – Rs 7,894.16 crore; Internal Debt (including Ways and means advances (WMA) from RBI) – Rs. 4,407.15 crore, and Recovery of Loans and Advances – Rs. 1.5 crore. In other words, nearly 46 % of State’s fund comes as Grants and Loans and 24% as Internal Debt.

The receipts pattern in a way gives a vivid glimpse of how those incomes are spent. For instance, with nearly 25.03% of the income as internal debt, the state spent over 28% of the income on Servicing of Debt (including repayment of WMA).

Another 46% is spent on non-development expenditure, leaving a mere 26% for developmental purposes (Rs 4678.95 crore) out of Rs 18,012.73 crore estimated expenditure. In other words, 76% of the total expenditure incurred does not create assets or brings new development for the state. One may call this normal expenses of the government, given the state of affairs.

Presenting the budget on February 26, Chief Minister Neiphu Rio, who also holds finance portfolio, termed it a ‘people friendly budget’; but such sober data conspicuously reflects the lack of room to manoeuvre for the government to implement such ‘people friendly’ policies.’

As a result, the money earmarked for developmental activities in 2019-20 was a minuscule Rs.609 crore in the budget estimated to close at a negative balance of Rs. 1,611.98 crore. Given the state of affairs, one is not sure whether the resources earmarked for the developmental activities, would reach the real beneficiaries – the general public.

Rio told a press conference after presentation that the budget for 2019-20 is a people friendly budget as the government is not “imposing any new taxes or placing any additional burden on the common people in order to generate revenue.”

However, it neither has scope for creating any new ‘people friendly’ schemes nor it can come out with an effective policy measure to generate new resources, notwithstanding the Chief Minister pledging the intention of the government to make an attempt to “mobilise resources through other means”

“If he can’t ignore facts, he’s got no business being a politician,” caustically quipped Sir Humphrey Appleby, the fictional character from the British political satire in an episode in ‘Yes Prime Minister.’

While the ‘reel life’ insinuations are often considered far reality, it is not unfounded. The State government may do well to bring its house in order, lest people begin to quip, ‘Reel life is being refelcted in Real life.’